FDIC Hits Record "Default" Level As Deposit Insurance Fund Plunges By $12.7 Billion To NEGATIVE 20.9 Billion

Tyler Durden's picture

From Dow Jones:

The U.S. banking industry continued to struggle in the fourth quarter, as the number of banks on the brink of failure continued
to rise and the government's fund to protect deposits fell sharply into the red.

The Federal Deposit Insurance Corp. said Tuesday that its deposit-insurance fund fell to $20.9 billion at the end of 2009, a $12.6 billion drop in the final three months of the year, as bank failures continued at a pace not seen since the savings and loan crisis. The fund's reserve ratio was -0.39% at the end of the quarter, the lowest on record for the combined bank and thrift fund.

The deposit insurance fund is unlikely to soon see a respite from a decline in the number of failing banks: The FDIC said the number of banks on its "problem" list climbed to 702 at the end of 2009 from 552 at the end of September and 252 at the end of 2008. The number of banks on the list, which have combined assets of $402.8 billion, is the highest since June 1993.

"The continued rise in loan losses and troubled assets points to further pressure on earnings," FDIC Chairman Sheila Bair said in a statement. "The growth in the numbers and assets of institutions on our 'Problem List' points to a likely rise in the number of failures."

Industry indicators deteriorated nearly across the board. The FDIC said loan losses for U.S. banks climbed for the 12th straight quarter, while the total loan balances for U.S. banks continued to fall. The agency said the quarterly net charge-off rate and the total number of loans at least three months past due both were at the highest level ever recorded in the 26 years the data have been collected.

Net charge-offs of troubled loans occurred across all major loan categories, led by a $3.3 billion increase in residential mortgage loans. The FDIC said U.S. banks' coverage ratio--reserves divided by the amount of noncurrent loans--fell to 58.1% in the fourth quarter from 60.1% in the third quarter.

The FDIC did cite some reasons for optimism. The banking industry was able to report a modest profit of $914 million in the fourth quarter, compared with a record loss of $37.8 billion in the final three months of 2008. And while the largest banks were the beneficiaries of much of the earnings improvement, the agency said more than half of FDIC-insured banks saw a year-over-year improvement in their net income.

Banks' profits were helped by improvements in trading revenue, which totaled $2.8 billion the fourth quarter, and servicing income, which represented a gain of $8.0 billion. The FDIC also said that more than half of all banks reported higher net interest margins in the fourth quarter compared with third-quarter levels.

"Resolving these credit market dislocations will take time," Bair said, describing banks as "bumping along the bottom of the credit cycle."

Here is the full abysmal Q4 FDIC report.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Anonymous's picture

The ONLY thing worse than welfare for the poor is welfare for the rich.

Bankers have reached a new low on the anus of humanity.

The next monetary injection will come as a suppository to taxpayers just like the last.

Until thousands end up behind bars there will be no recovery, you bulls are idiots with too much risk in your panties.

Astute Investor's picture

"The faster you fall behind, the more time you have to catch-up."

- Glenn Celentano -

Postal's picture

[sarcasm]

No problem! Things are great, CNBC said so...

[/sarcasm]

bugs_'s picture

Sheila the cupboards bare!

Call out for pizza!

AnonymousMonetarist's picture

Can't decide what would make the best t-shirt ...

'Bumping along the bottom!'

'Mark it Gyro!'

or

'Bair down!'

Mr Lennon Hendrix's picture

This is the apex!  Inflation or deflation BIG now!

Miyagi_san's picture

13% on the "problem list" have gone under......so.....bairly there

Anonymous's picture

I have long said that ultimately every bank in America will fail and be incorporated into the JPMorgan/Chase conglomerate, including ultimately BOA , which will be the last shoe to drop.

At that time, you will be assigned a blood sugar powered RFID implant gizmo with a cyanide blob that can be dispensed on command by satellite signal, along with heart rate monitors, GPS, temperature sensor, blood sugar analysis and other neat stuff to remotely monitor your wellbeing. Probably a microphone too. It might even feature some kind of neural interface system that can cause you to wince if anyone says anything negative about the government.

This is our destiny. This is sparta!

-MobBarley

Ned Zeppelin's picture

If you are really convinced that that day will soon come when USDs are no longer an acceptable currency, gold won't help you either.

GUNS, BITCHES.

delacroix's picture

RFID's have short range, but I'm sure there is more sophisticated tech, in the works.   USD's may be accepted for a long time, it will just take increasingly more, to purchase the same item. what's the alternative?                                                                                                                                                                                                                                                                                                                                                                                

Anonymous's picture

Intel starting making chips for the President, Regan was the first to have it implanted, I now the guy who designed it-

Anonymous's picture

Headline says NEGATIVE $20.9 billion, but article doesn't use the word NEGATIVE..?

Anonymous's picture

What's the the best "FIXED FINITE NON-MANUFACTURE-ABLE INVESTMENT" in the USA, that can't be duplicated or taken from you? It's also insurable, rent-able, simple, in destructible, low to no maintenance, beautiful, serene, infinite, fixed, not physically removable, can be abused with fun, cars, guns, explosions, motorcycles, jet skis, boats, dune buggies, quads, and monster trucks? Yup, it's land! I have bought and sold over 17,000 acres in over 450 transactions. If you buy at the bottom and sell at the top you can average over 49% a month! Yup! I bought 300 parcels and sold 198 of them from 2000-2007. My average GROSS PROFIT WAS 1165% and my average HOLD was only 23.67 months! I am now buying land at 1-6% of what I sold it for. At 5 cents on the dollar, that's 1900% profit. At 10 cents on the dollar that's 900% profit. You can do the same but in smaller amounts. My goal in California is 25,000 acres, enough to put me in the elite Forbes 500 by 2019.

Anonymous's picture

Before 1930s, your birth certificate was the church's mark in your family Bible. Then you got a live birth certificate from the government. This was your articles of incorporation, your name changed from the first letter being capitalized to ALL CAPS on your birth certificate, ssan, and driver's license, for all those debts or the national deficit, your labors, property and taxes were pledged. So we are now slaves of the corporation UNITED STATE OF AMERICA, not the United State of America, to the Bankers of the FEDERAL BANK RESERVE. As a slave, you own no property as such. YOU can be killed, and all your property taken at their pleasure, we live in a fictive world right now. The laws support the legal fictions and we are not in reality owners of our own body or labor. Think about it, your land is some one elses property, as you are some one elses slave. We don't own anything, unless we opt of this system as a sovereign, independent, free man on the land, whereby corporate laws do not apply to sovereigns. Google it.

Tom123456's picture

Good Linux hosting option package offered by ucvhost which not only provides the best in terms of hosting packages but also believes in truly being there for the customer, 24x7. cheap vps Moreover , they offer unlimited bandwidth as well as nearly 1GB storage along with database maintenance, email facility along with storage, availability of sub domain and many other important features for a very low price. ucvhost thanks

John123456's picture

really <a href="http://rensoftglobal.com/">social networking website development</a>

shawnlee's picture

RFID's have short range, but I'm sure there is more sophisticated tech, in the works. USD's may be accepted for a long time, it will just take increasingly more, to purchase the same item. what's the alternative?

Same query,

tissot watches|70-647|650-393|thomas sabo jewelry

shawnlee's picture

RFID's have short range, but I'm sure there is more sophisticated tech, in the works. USD's may be accepted for a long time, it will just take increasingly more, to purchase the same item. what's the alternative?

Same query, db2 practice exam
itil v3 practice exam
hp practice exam
icnd practice exam
iseb practice exam
jncia practice exam
juniper practice exam
mcdba practice exam
mcdst practice exam
mcitp practice exam
mcpd practice exam
mcsa practice exam

kummar's picture

Just because the sheeple are revolting doesn´t mean they will EVER revolt
I have given up hope--too stupid, too brainwashed, and oo dependant on a broken system
Eventually they will line up nice and docil--to go into the Fema campstestking PMI-002 \ testking 199-01 \ testking C-TADM51-70 \ testking OG0-093 \ testking VCP-410 \ testking

kummar's picture

supply and demand curves would indicate a materially lower equilibrium price. This is ironic, as proper price discovery is critical for a true recovery, since Americans realize all too well that buying a house at prevailing levels in advance of the second down-legPass4sure 310-065
Pass4sure 642-504
Pass4sure 642-655
Pass4sure 650-195
Pass4sure HP0-P14
642-874
Pass4sure 642-971
Pass4sure 310-200
Pass4sure 642-533
Pass4sure 642-611
Pass4sure 642-691
Pass4sure HP0-D08

kummar's picture

supply and demand curves would indicate a materially lower equilibrium price. This is ironic, as proper price discovery is critical for a true recoveryPass4sure 642-067 \ 1z0-051 \ Pass4sure 310-065 \ Pass4sure 642-504 \ Pass4sure 642-655 \ Pass4sure 650-195 \ Pass4sure HP0-P14 \ Pass4sure 642-874 \ Pass4sure 642-971 \ Pass4sure 310-200 \ Pass4sure 642-533 \ 642-611

kummar's picture

supply and demand curves would indicate a materially lower equilibrium price. This is ironic, as proper price discovery is critical for a true recover server+ exam questions | sscp exam questions | vmware exam questions | sun exam questions | scjp exam questions | scwcd exam questions | scbcd exam questions | scmad exam questions | scjd exam questions | Pass4sure 640-802 | Pass4sure 350-001 | Pass4sure SY0-201

sun's picture

Dude, the Star Wars is cracking me up. Thanks for the great post, these are my fav so far. xbox 360 s

sun's picture

I found lots of interesting information here. The post was professionally written and I feel like the author has extensive knowledge in the subject. Keep it that way online masters in sports

john310's picture

Since the 1960s, meditation has been the focus of increasing scientific research of uneven rigor and quality In over 1,000 published research studies, various methods of meditation have been linked to changes in metabolism, blood pressure, brain activation, and other bodily processes 70-685 dumps/642-384 dumps/350-050 dumps/642-647 dumps/1Y0-A24 dumps/70-290 dumps/1Y0-A15 dumps/HP0-S27 dumps/E20-329 dumps/E20-591 dumps